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  • Subject Name : Enterprise leadership

Enterprise Leadership: Virgin Australia Airline

Introduction to Virgin Australia Airline

Virgin Australia Airline formerly known as Virgin blue is the 2nd largest Airline in Australia co-founded in 2000 by Sir Richard Branson and Brett Godfrey. With an annual revenue of AUS $5.8 billion in 2019 (Virgin Airlines), it operates in 56 destination with a fleet size of 98. It is headquartered in Brisbane, Queensland. The company begin its journey with 2 Boeing 737-400 in 2000 later it expanded to almost all major cities in Australia. The assignment is going to analyse the present scenario of the company in tackling the bankruptcy due to the corona virus outbreak and its suggestive measure.

Literature Review of Virgin Australia Airline

The suggestive measure while dealing with the bankruptcy in The Virgin Airline Australia is the area of my domain. As the outbreak of deadly COVID-19 has stalled the airline industry to a large extent with only few fleet operating, the financial crunch is hitting the 2nd largest airline bringing in the voluntary administration to solve the insolvency crisis. Virgin Airline Australia is facing a debt of $4.8 billion and is also unable to provide the federal government bailout (Guardian, 2020). Since then about 10,000 staff, 6000 contractors and 4000 suppliers are been affected by the middle of the financial crisis. Virgin Australia asked for a monetary help of $1.8 billion from the government but still it is access to only $200 million. As the firm is heading towards a broke situation the firm has appointed administrator Deloitte for the transition of recovery by involving the entire stakeholder community (Firepost, 2020). Administrator is looking for bidders who are willing to have a bulk share in this bidding process so that it will be easy for any business house to monitor its financial transaction.

Discussion of Virgin Australia Airline

The company is suffering from insolvency and requires immediate pumping of cash and guarantors who can devise strategy to its early recovery (Roberts, 2020). The bidding process is relatively slow which will impact the employees whose salary is still on hold. Creditors still believe that the recovery could take around 6 months until a big investment is seen in the upcoming bidding process. As Virgin airline has cancelled approximately 6400 flights and has unable to refund, or offer credits to customers the scenario is putting the firm into a competitive disadvantage (The Guardian, 2020) As the flight is not resuming operation during the administration period government should step in to liquidate the insolvency with easy loan.

The key challenges lies in the motive to fund Virgin Airline and rebuild its marketing plan. The feasibility plan of channelizing the insolvency is facing stiff opposition from multiple stakeholders who still believe that Virgin Airline could recover from the current phase when the lockdown ends and the flight operation resumes. Since it is the 2nd largest airline in Australia and its existence in airline industry is necessary in connecting Australian cities and helping in recovery of Australian economy post lockdown(BBC News. 2020).

Recommendation for Virgin Australia Airline

  • Faster bidding process- The early the bidding takes place; it will be easy for all the stakeholder to plan accordingly to implement their needs and demands.
  • Governmental intervention- Australian government must help Virgin Australia financially either by purchasing stake or allow increase flow of credit with less return policy.
  • Running International flights post recovery- The airline must aim to fly international as in this current scenario with less fleet domestic travel will not fetch as much return on investment as in the case of international flights with longer distance with more frequency.
  • Early start of Virgin Velocity- Since velocity is not in the part of the administration period and is one of the key profit making verticals of Virgin Airlines, its frozen redemption must be reopened so that both the company and customer could access the point making entity and bring Virgin back on track.

Self- Reflection of Virgin Australia Airline

The present Virgin Airline situation is really sad. The COVID-19 outbreak has taken thousands of life and has affected the normal life style of a healthy human being. As the airline industry helps in connecting people across the globe its recovery is indeed a necessary so that people can fly back to continue their business, meet their peers and build a strong global brotherhood. However the crisis faced by the firm needs through investigation to deal such situation if it persist and a contingency plan for near future. We should be aware about the surroundings and the ways to survive the deadly outbreak with social distancing and protection so that it might not affect others.

The idea of bringing new change in functioning of airline with precaution requires the upmost attention. As COVID-19 may enter into community stage of transmission it may lead to resurgence which will impact the life of ordinary Australians. The company needs to feel the pain of the entire employee and its associate who are entirely depended on this airline industry. They should help their standing employee through assessing their grief and address openly of what is needed to be done. Communication plays a vital role during the time of any crisis. The top level management must disclose all possible options to the mid and the lower level workers so that they could be the part of the decision making process.

Conclusion on Virgin Australia Airline

Virgin Airline must proceed with the bidding process and ensure it has been bought by a single business entity. Restarting its operation to gain confidence in the minds of creditors and making believe the customer that airline will work in client satisfaction with quality service much better than its competitors like Emirates. The present scenario makes it a more responsible airline with customer safety especially hygiene and sophisticated transport system with services like monitoring customers from entry to airport till departure. As multiple bidders have shown interested in bringing stakes, Australian government must push its stake in the shareholder venue to help revive the company from bankruptcy. Lastly the company must ensure they deliver the promise they made to the customers- Building relation with flying.

References for Virgin Australia Airline

Virgin Airline Australia. (2019). Annual report. 

The Guardian. (2020). Virgin Australia: Queensland government could join multiple bids for airline. Retrieved from https://www.theguardian.com/business/2020/may/14/virgin-australia-queensland-government-could-join-multiple-bids-for-airline

Firepost. (2020). Rahul Bhatia’s InterGlobe enterprises joins list of bidders for bankrupt airline Virgin Australia. Retrieved from https://www.firstpost.com/business/rahul-bhatias-interglobe-enterprises-joins-list-of-bidders-for-bankrupt-airline-virgin-australia-8357651.html

BBC News. (2020). Coronavirus: Virgin Atlantic to cut 3000 jobs and quit Gatwick. Retrieved from https://www.bbc.com/news/business-52542038

Roberts, L., (2020). Coronavirus forced virgin Australia into voluntary administration. Here how the airline began. Retrieved from https://www.abc.net.au/news/2020-04-22/coronavirus-virgin-australia-airline-history/12165130

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